Intellectual Property Study

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NATIONAL INNOVATION POLICY
Intellectual Property Study
by
*Raguraman Gurusamy


INTRODUCTION

During early days man started creating his own world by application of his brain or mind by
imagination and creativity. With his imagination and creativity, he has been producing
various articles or products for his needs, comfort and convenience. In early era , the
creations and inventions fell in a public domain. Where anyone could copy these creations
without any restriction, or payment. However, with the passage of time, the importance
and value of these creations was realised. The commercial aspect started playing a
significant roll in these creations. By end of twentieth Century, the things created and
invented by the human mind were recognised as INTELLECTUAL PROPERTY of the
owner. These were also known as intangible properties.

Intellectual Property rights are like any other property rights – they allow the creator, or
owner, of a patent, trademark, or copyright to benefit from their own creation or work or
investment. These rights are outlined in Article 27 of the Universal Declaration of human
Rights, which sets forth the right benefit from the protection of moral and material interests
resulting from authorship and any scientific, literary, or artistic production.

Intellectual Property can have significant commercial and financial benefits for individual,
research groups and the Universities including: It converts knowledge into tangible assets
which can be transferred, assigned and licensed; It can generate significant royalty
revenues for the University and the researchers; Inventors qualify for income obtained
from licensing in the form of royalty payment; It can provide a legal monopoly in
technology niche area.


In recent years, Malaysia has developed into one of the most attractive investment
destination, not only for labour intensive manufacturing but also for innovative and high
tech industries such as Dyson, Motorola, Intel etc. However, the uncertainty around the
protection of Intellectual Property is still an important deterrent for foreign as well as
domestic firms engaging in Research and Development (R&D) related activities. Despite
the tremendous progress in the legal system such as setting up the Intellectual Property

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Courts and the amendment to the Patent and Trademark laws, the Intellectual Property in
Malaysia is associated with series of cultural, economic, and political factors that
significantly affect the incentives and outcomes of innovation efforts.

Unlike, the legal system, the complementary forces behind Intellectual Property protection
vary across different types of firms, small, private enterprises, for example, will find more
constrain in financing R&D and retaining talents compared with the large companies or
multi-national. The types of R&D activities also matters: while firms aiming for frontier
technologies are concerned about legal enforcement of patent rights, firms focusing on
reserve engineering and manufacturing excellence would find other factors, such as
market access and local protectionism, much more relevant. Thus, it is important to look
into the heterogeneity of firms and firm strategies in order to have a comprehensive view
of Intellectual Property Eco- system in Malaysia.

As more and more Universities, Research Institutions and Malaysian firms develop their
R&D capacity and accumulate Intellectual Property, the general public’s perception of
Intellectual Property will change and a greater domestic push for a stronger Intellectual
Property protection is expected. To get ready for global competition, Malaysia need to
build up their In Intellectual Property portfolios.

Japan took a drastic step to become a competitive nation after the second World War, the
driving forces behind Japan's high economic growth were the industriousness of the
Japanese people, the strength of heavy and chemical related industry and high
productivity and quality, especially in the fields of manufacturing and assembly. The
Japanese production system introduced and improved upon technology from the United
States and Europe, improved on-site production techniques and benefited from the strong
Japanese inclination toward teamwork.

However, due to the increased competitiveness of nations such as those in other parts of
Asia through low labor costs and improved production techniques and global advances in
the field of information technology, in order to be competitive in the global market Japan
moved away from the economic model that brought it past success.

In the 21st century, Malaysia needs to discover new economic opportunity by attaching
further importance to intellectual property. Creation of a vision toward this end is itself a

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pressing issue. This outline is the strategy to promote in a timely manner high quality
intellectual property, exploit this property and make it a source of national wealth. A
mechanism to develop intellectual property, an environment for its precise evaluation, and
distribution and wide application in society will lead to the ability, through reinvestment, to
create the next generation of intellectual property. Reform toward development of this
cycle of intellectual creation is indispensable to pave the way to the future for Malaysia.
With the national goal of becoming a high-income nation, Malaysia will be able to become
a world leader in many fields of industry and culture if comprehensive policies are carried
out without delay.

Becoming a " high income nation" means establishing in Malaysia an appreciation of the
importance of invention and creation. For realisation of this policy, along with
reconstructing the manufacturing base, it is necessary to stimulate intellectual creation on
government, academic, corporate, and individual levels in response to the globalisation of
economic activity and the advancement of information technology. It is also necessary to
properly protect the intellectual property rights, the results of this creative activity and to
construct an economic and social system for their effective utilisation as the source of
value-added products and services.

Meanwhile, the rapid progress of information and communications technology has also
brought about the negative effect of accelerated counterfeiting activities. In this situation
recovery of development funds by investors is becoming difficult. In order to establish
intellectual property, the foundation for strengthening industrial competitiveness, a deep
awareness of the characteristics of this age of information is essential.

Along with nurturing creativity through elementary and middle school education, promoting
strategic plans for the creation of intellectual property in businesses and universities and
developing experts, administrative organs should make efforts to prepare intellectual
property-related legislation and tax reductions to advance the protection and exploitation
of the results of outstanding inventions. In addition, these administrative bodies should
develop the information infrastructure for intellectual property and retain a constant
awareness that they are providers of intellectual property-related administrative services.
Moreover, action is required in a wide variety of fields including reforms in the judicial field
and the promotion of aggressive trade and foreign policy in order to respond to overseas
counterfeiting and piracy.

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1. OWNERSHIP OF INTELLECTUAL PROPERTY
Universities and Research Institutions generally address intellectual property ownership
issues through internal policies. These organisations vary in their practices as to whether
they claim ownership of intellectual property generated by staff or within the organisation.
Typically, however, they will seek to claim ownership. In addition, an organisation’s
policies often include provisions to encourage publication and the wide dissemination of
research. However, where research leads to an invention, these policies usually provide
for the organisation to delay publication while patenting and commercialisation are
explored. Policies also normally provide that commercial development must be for the
benefit of the organisation, the inventor, government and commercial or other partners.
The Intellectual Property Commercialisation Policy for Research and Development
projects Funded by the Government of Malaysia, which, was launched in June 2009 by
Y.Bhg Dato’ Seri Dr Maximus J. Ongkili, the Minister of Science Technology and
Innovation on behalf of the Government of Malaysia, arguably is one of the most influential
pieces of policies to impact the field of intellectual property law in the 21st century. The
above-mentioned policy permits a university, small business, or non-profit institution using
federal funds for research to produce an invention to retain the title on any patent issued
for such inventions. Prior to this policy, the government retained ownership of all patents
granted using government money. The government also retained the right to license out
the inventions to the private sector. This, however, was detrimental to the growth of the
Malaysia because companies wanted to develop products it had the exclusive rights to
sell. Thus, universities were creating new and exciting technology using government funds
that were never reaching the industry or the public. The policy changed the way these
government-funded patents were handled and there was an explosion of university
patenting following 2009. For a good while it seemed the Policy produced only positive
consequences for academia and the private sector.

It sad that the policy has not been fully implemented till today due to some unforeseen
circumstances. One of the major reasons being, the grants for research given out after the
policy came into effect yet to complete and we have to wait and see. The lack of
awareness on the policy also contributes a major setback for the implementation of the
policy. Ministry of Science, Technology and Innovation should conduct awareness

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programme and road shows to create awareness among the researchers and inventors on
the importance of the policy. Due to lack of awareness some Universities and Research
Institutions are still relying on the Public Service Department Circular (Pekeliling
Perkhidmatan Bilangan 5 Tahun 1999) despite been abolished by the new policy which
was endorsed by Public Service Department through circular (Pekeliling Perkhidmatan
Bilangan 30 Tahun 2009)

Besides the Intellectual Property Commercialisation Policy for Research and Development
projects Funded by the Government of Malaysia, the Malaysian Intellectual Property office
also launched the Intellectual Property Policy but till today nothing much has materialised
from that policy either. This is again due to financial constrain and lack of staffs to
implement the policy.

However, especially recently, there have been some issues raised about the effects of the
policy upon trends in research, conflicts of interest and uncertainty with the ownership of
equity in a spin off company. The portioning of equity to the researchers in a spin off
company was intentionally left out by the drafter of the Intellectual Property
Commercialisation Policy for Research and Development projects Funded by the
Government of Malaysia, to give Universities (or the recipient of the grant as specified in
the policy) the autonomy powers to decide how much equity or shares can be owned by
the inventor who created the technology in the spin off company.


2. ADVISORY COUNCIL
Important economic, social, political and technology developments over the past few years
had a fundamental impact on how intellectual property is created, exploited and used. Last
couple of years Malaysia has entered into couple of treaties, international trade agreement
and international protocols. Many of these agreements involve intellectual property. One of
the essential agreements for Malaysia is the TRIPs and Free Trade Agreements. Free
Trade Agreements (FTAs) have proved to be one of the best ways to open up foreign
markets to U.S. exporters. A free trade agreement is a pact between two countries or
areas in which they both agree to lift most or all tariffs, quotas, special fees and taxes, and
other barriers to trade between the entities.

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An FTA is an agreement between two or more countries where the countries agree on
certain behaviors that affect trade in goods and services, and protections for investors and
intellectual property rights, among other topics. For the United States, the main goal of
trade agreements is to reduce barriers to U.S. exports, and protect U.S. interests and
enhance the rule of law in the FTA partner country. The reduction of trade barriers and the
creation of a more stable and transparent trading and investment environment make it
easier and cheaper for companies to export their products and services to trading partner
markets. FTAs usually build off of the agreements negotiated in the World Trade
Organization (WTO). For example, in the WTO, each country agrees to issue, at the
request of the importer or exporter, binding advance determinations on where a product
will be viewed as coming from, since many products are made up of parts from multiple
countries.
As discussed above besides tariffs, quotas, and tax, lately the Chapter on Intellectual
Property is playing a very important role and is being a priority and favourite chapter for
western countries. If Malaysia is not careful in the negotiation on the intellectual property
we tend to loose out to the rest of the world. In the current scenario the government
officials represent Malaysian intellectual property negotiating team from various ministries.
Lately there has been dissatisfaction between the NGO’s, the way IPR chapter is been
negotiated. There is a call from these NGOs requesting the Government to be more
transparent and not to bow to pressure from US and EU countries in giving away more
than we could afford issues relating to IPR. These big nations always put a lot of pressure
on the developing countries to go beyond the Trade Related Intellectual Property Rights
agreement (TRIPs) - (TRIPs Plus). The developed countries attempt to remove /reduce
the flexibilities provided under TRIPs and establish even higher standards of IPRs in
developing countries. Besides these through FTAs and bilateral agreement, the USA and
EU seeks exclusive rights over test data provided by the originator companies, which
would prevent the registration and sale of generic medicine .
Looking at the issues above our officials can be good in the area of law but they are not
well versed with the entire eco system. The agreements need to be studied very carefully
the impact and the consequence to the country before recommendation can be forwarded
the Cabinet Ministries for approval. In order to get the best quality of result it is
recommended an Intellectual Property Advisory Council is Establish as an independent
body appointed by the government, and the ultimate duty is to advise the Government on
intellectual property matters relating to treaties, international trade agreements, protocols,

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government contracts and other international and domestic agreements involving issues
on intellectual property. This Intellectual Property Advisory Council shall be placed under
the radar of the Prime Ministers office and parked under Agensi Inovasi Malaysia. The
Malaysian Intellectual Property office will have two permanent representatives in this
council.

3. PATENT APPLICATIONS IN MALAYSIA

Unfortunately it is extremely easy to copy information. In addition, since information is not
tangible many people can use it simultaneously. As regards one type of information,
intellectual property loses value if not exploited. Construction of a system balancing
protection and exploitation is therefore indispensable for the establishment of an
intellectual creation cycle. Accordingly, in order to turn information into a significant source
of national wealth in Malaysia in the 21st century, strong legal protection is necessary.
However, it is not sufficient to protect information just under legal provisions, practical
protection through administration of justice is necessary at the same time. Moreover, if a
practical system is not established in which adequate value is realized through such
means as contracts and technical development, the incentive to create intellectual
property will dry up and created information will be concealed. As a result the wealth
derived from intellectual property will be greatly reduced. In this sense, we should connect
the cycle of intellectual creation to a larger cycle by constructing a system of protection
and exploitation of intellectual property, taking into consideration the characteristics of
information as opposed to those of tangible items.

If a mechanism to develop high-quality intellectual property is constructed, the intellectual
property is highly protected and widely exploited in society and the power to create the
next generation of intellectual property is realised through reinvestment. When this
intellectual creation cycle rapidly expands and revolves, great benefits will be realised
toward social and economic development.

YEAR
APPLICATION GRANTED
Malaysia Foreign Total Malaysia Foreign Total
1986 29 233 262 - - -

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Source: Malaysia Intellectual Property Corporation


However, it cannot be said that the present situation in Malaysia vis-a-vis the intellectual
creation cycle is satisfactory. Taking patents as an example, Malaysians are very far
behind in filing patents. Statistic from the Malaysian Intellectual Property Office clearly
defines that the number of patent files by local are only 1/8 compare to foreign filing.

A study is done on the utility models (or other equivalent names) of a few countries to
determine the standards of examination and terms of protection provided for this system.

COUNTRY NAME
SUBSTANTIVE
EXAMINATION

DURATION OF
PROTECTION


MAXIMUM
NUMBER
OF CLAIMS
1987 71 3,195 3,266 - - -
1988 73 1,547 1,620 0 6 6
1989 84 1,803 1,887 11 121 132
1990 92 2,213 2,305 20 498 518
1991 106 2,321 2,427 29 1,021 1,050
1992 151 2,260 2,411 10 1,124 1,134
1993 198 2,684 2,882 14 1,270 1,284
1994 223 3,364 3,587 21 1,608 1,629
1995 185 3,992 4,177 29 1,724 1,753
1996 221 5,354 5,575 79 1,722 1,801
1997 179 6,278 6,457 52 741 793
1998 193 5,770 5,963 21 545 566
1999 218 5,624 5,842 39 683 722
2000 206 6,021 6,227 24 381 405
2001 271 5,663 5,934 18 1,452 1,470
2002 322 4,615 4,937 32 1,460 1,492
2003 376 4,686 5,062 31 1,547 1,578
2004 522 4,920 5,442 24 2,323 2,347
2005 522 5,764 6,286 37 2,471 2,508
2006 531 4,269 4,800 187 6,562 6,749
2007 670 1,702 2,372 338 6,645 6,983
2008 864 4,539 5,403 198 2,044 2,242
2009 1,234 4,503 5,737 270 3,198 3,468
2010 1,275 5,189 6,464 204 1,973 2,177
MAC 2011 288 1,186 1,474 107 309 416
Total 9,104 99,695 108,799 1,795 41,428 43,223

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AUSTRALIA Innovation
Patent
No 8 Years 5 Claims
JAPAN Utility Model No Not more than
15 Years
NA
KOREA Utility Model Yes Not more than
15 Years
NA
CHINA Utility Model No 10 Years NA
MALAYSIA Utility
Innovation
Yes 10 + 5 + 5 Years 1 Claim

Australia

In Australia, Innovation Patent (INP) is given for a lower level invention to help especially
SMEs to obtain quick and relatively cheap rights. INP is only subjected to formality
examination while substantive examination will only be carried out on request by either the
applicant or a third party.

INP provides a lower term of protection than a standard patent. INP protection will only
lasts for 8 years compared to a standard patent of 20 years. The maximum number of
claims allowed is 5. Substantive examination may be requested at any time, but not later
than 3 years after the application was filed. INP will be subjected to an inventive height
level that is lower than for a standard patent during substantive examination. If the request
is made by a third party, the cost of examination will be shared equally between the owner
and the third party.

Due to the lack of substantive examination, the owner of INP is precluded from initiating
infringement action or threatening such action until the substantive examination has been
completed.




Japan


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Utility Model applications in Japan (UMJ) dispensed the substantive examination on
novelty and inventive step on 1 January 1994. The grants of UMJ is based on a series of
basic requirements such as: not liable to contravene public order and morality; satisfies the
requirements for the format of claims as well as the unity of application; the descriptions
are not conspicuously unclear and the device relates to the shape or construction of
articles.

After the registration of the UMJ, JPO publishes the details of the claimed device to lay it
open to the public. Any person at any time could request for a Registrability Report,
prepared by an examiner, to determine the validity of the rights given.
In Japan, the rights to Utility Model could last not more than 15 years. However, the
registration fee for the first to third year must be paid at the time of filing.

Korea

Effective on 1 October 2006, the Korean Utility Model (UMK) revived the substantive
examination procedure to produce more stable rights. The advantage of allowing the
registration of UMK without substantive examination diminished since the average
pendency period for patent examination with substantive examination was expected to
decrease tremendously in 2006.

The request for examination of utility model can be made within 3 years from filing date
compared to 5 years for patent applications. However, the inventive step requirement level
for utility model is lower than that is required for patent.


China
Utility Model applications for 2009 in China amounts to 310,771, with 99.4% filings made
by residents of China. It protects any new technical solution relating to the shape, the
structure or their combination, of a product which is fit for practical use.

Filing of both invention applications and utility model applications for the same invention is
allowed in China. However, once the invention patent is granted, the applicant is required
to abandon the utility model patent.


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Utility Model without any substantive examination has a shorter period of protection, which
is 10 years compared to 20 years for invention patent.

Malaysia
In 2010, Malaysia received a total of 86 utility innovation (UI) applications, which is 1.33%
from the total of 6, 464 applications received. Filings from Malaysian residents was 49
applications. UI in Malaysia is only subjected to novelty check during substantive
examination. However, the number of claims allowed is only limited to 1. The term for
protection of UI is 10 years and could be extended for another 5 + 5 years subject to proof
of working.

A study on the World Intellectual Property Organization statistics shows that utility model
protection is most widespread in countries such as Japan, China, Korea, Taiwan and
Germany. Utility models without substantive examination can be an effective protection
for products with a short life cycle or when an urgent protection is needed. It provides a
relatively lower cost means of protection, thus suitable for residents, especially the small
and medium enterprises. Recommended Malaysian Intellectual Property office to look into
the above option and amend the patent act accordingly. This will enable individual, SME’s
and inventors to file for more patent and when there is an increase in patent filing and
patent grant, this will contribute to a positive innovation indicator for the country.

4. EXPANSION OF THE HUMAN CAPITAL

In addition to developing leaders in the creation of intellectual property, there is a pressing
need to train experts to supply high-level, specialist services for obtaining intellectual
property rights, settling disputes, and drawing up intellectual property contracts. While IP is
becoming a more popular topic in seminars and conferences, overall the approach is too
fragmented and very often targeted towards the legal community. To fully equip people
with IP knowledge requires a more structured and long-term approach. Whilst currently
there is an IP training centre and IP is a subject taught to law students in Universities there
is a need to set up a full institute dedicated to IP, which could potentially serve as a one-
stop training agency. Toward the strengthening of intellectual property education, the
creation of Malaysian Intellectual Property Academy placing emphasis on intellectual
property is much anticipated. In order to train legal professionals specializing in intellectual
property, it is necessary to strengthen education in all legal fields relating to business,

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commencing with intellectual property law. From the viewpoint of encouraging the
establishment of Malaysian Intellectual Property Academy specialising in intellectual
property, it is necessary to design a system that enables all universities to introduce
Intellectual Property as a core paper in each and every faculties. Such an environment will
produce capable intellectual property law specialists.

For businesses to obtain results from intellectual property created in universities and public
research institutes, specialists both in relevant fields of technology and in the management
of processes from research and development to exploitation of R&D results are needed.
However, since such specialists are not available in Malaysia, the establishment of
Malaysian Intellectual Property Academy will be able to train such experts with the
assistance from Global Intellectual Property Academy (GIPA), World Intellectual Property
Organisation and other agencies with vast experience and knowledge.

For such an institute to realise its goals, it is suggested that training should not just be
limited to the traditional or more obvious recipients i.e. IP examiners at PHIM, enforcement
officials and the judiciary but also be targeted towards creating a pool of specialist patent
drafters. Patent drafters need not have legal training or be legally qualified as the skill-sets
required are more technical or scientific in nature. A patent drafter would be required to
understand the field of invention and articulate the novel and inventive characteristics of
the invention to ensure that successful registration of the patent is achieved. As such,
patent drafters traditionally hail from science, engineering and more often in recent times,
ICT background and qualifications.
Current practices in Malaysia see tens of thousands (if not more) of Ringgit flowing outside
our borders into countries like the UK, US, Australia and Singapore in order to obtain the
services of specialist patent drafters. Such expertise does not currently exist in Malaysia
but there is no reason why it can’t. The Academy will offer capacity building programs in
Malaysia and around the South East Asia on intellectual property protection, enforcement,
and capitalization. Capacity-building programs are offered to patent, trademark and
copyright officials, judges, prosecutors, police, customs officials, foreign policy makers,
and enforcement officers, examiners and rights owners.
It is suggested that perhaps the relevant authorities should consider IP training for ICT or
science graduates as an alternative to traditional job prospects. IP training may even be
offered to our existing pool of unemployed science or engineering undergraduates who

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can as a start under-study foreign experts providing such advise to legal firms – thereby
ensuring new skills and job opportunities whilst at the same time reducing the amount of
Ringgit outflow overseas for such services.
The programs present the Malaysian methods for protecting the IP rights of business
owners, complying with international IP-related treaty stipulations that protect the IP rights
of business owners, and administering patent and trademark examining operations. In
delivering capacity building programs the Academy works closely with other states such as
Korea, Japan, and United States government agencies, trading partners and international
organisations.
Through the programs officials are able to collaborate on understanding the international
intellectual property obligations and norms. The participants are exposed to a Malaysian
model of protecting and enforcing intellectual property rights and promoting discussion of
intellectual property issues in a learning environment.
5. NATIONAL TECHNOLOGY TRANSFER OFFICE/ NATIONAL INNOVATION AND
COMMERCIALISATION OFFICE (NICO)

Based on an awareness of the situation mentioned above, with the aim of becoming a high
income nation, the Government of Malaysia have to promote strategic responses in the
four fields of "creation," "protection," and "exploitation" of intellectual property in each
aspect of the intellectual creation cycle, and the "enhancement of capacity building" that
supports these three aspects.

It is indispensable that universities, which were in the past known as "ivory towers," be
reborn as systems that themselves create intellectual property. In universities, even if
outstanding inventions are created, systems are not in place to return the results to society
by obtaining intellectual property rights for those inventions. In addition, faculty seems to
lack interest in returning the results of research to society even though they are
enthusiastic about conducting research. In recent years, although many TLOs have been
established and this situation seems to be slowly changing, Malaysia still lags behind our
neighbouring countries in this area.

Due to such issues as limited capital, it is difficult for companies to carry out basic,
innovative research. Expectations are therefore rising for universities and public research

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institutions to make innovative breakthroughs connected to obtaining basic findings as well
as to create new technology and industry. Toward this goal, it is necessary for these
institutions to promote globally competitive research and development in order to ignite the
cycle of intellectual creation. Furthermore, systems to obtain intellectual property rights for
research and development results and return them to the society must be established.
Establishment of these systems will be of great assistance in the development of
university-launched venture companies and will also contribute to economic revitalisation.

To commercialise intellectual property as products and services and promote its effective
exploitation, it is necessary to support this exploitation by small and medium enterprises,
venture companies and individuals. It is necessary to promote the preparation of such an
environment. To realise this goal, it is recommended that a National Technology Transfer
Officer is Established within Agensi Inovasi Malaysia to assist public and private
universities and public Research Institutions to commercialise their R&D findings along
with implementing top quality projects in which universities and public research institutes
cooperate with companies from the initial research stage with a view to practical
exploitation, in anticipation of actual utilisation an environment must be prepared in which
patent information can be utilized for the purpose of research and development as well as
acquiring new patents. The recommended National Technology Transfer Office will act to
assists and expedite the Technology Transfers Office in the local university. Besides
assisting the Universities and PRIs in commercializing the Research and Development
findings, the National Technology Transfer office will also play a vital role as an advisory
wing on Intellectual Property issues such as IP Management, IP Audit, IP best practices,
IP standards, training, working along with patent agents and other relevant parties to
provide a better and fast service.

The establishment of the National Technology Transfer office itself is not enough to
encourage the inventors to come up with quality research. Researchers do not conduct
research solely with the objective of remuneration. However, if there is no recognition of
their efforts they are not acknowledged by the general public. If young people cannot
appreciate the efforts of such researchers then the future leaders of Malaysia will not
aspire to such a position. It is recommended that inventors are given sufficient incentives
for every disclosure, patent filing and patent grant. Currently the Intellectual Property
Commercialisation Policy for Research and Development projects Funded by the
Government of Malaysia gives incentives for the inventors i.e. Ringgit Malaysia (RM)

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500.00 for the disclosure of their invention and RM5,000.00 for patent filing and RM
10,000.00 for a successful patent grant. However these incentives should also be given to
all inventors rather than just restricting to government grant receivers. These incentives
will encourage inventors to do more research and come up with top quality invention.




6. INTELLECTUAL PROPERTY EDUCATION IN SCHOOL AND INSTITUTE OF
HIGHER LEARNING

Continuous development of core, innovative inventions will be the source of wealth for
Malaysia’s economy and society. Toward this goal, however, it is first necessary to
develop human resources that create outstanding intellectual property. To develop world-
class researchers, it is urgently necessary to take a comprehensive approach aimed at
implementing educational programs that foster creativeness from elementary and
secondary education through to higher education. Toward this end, education in Malaysia
must cultivate appreciation of freethinking and ingenuity from as early as the elementary
level.

Along with training of researchers for the purpose of enhancing creativity, universities and
graduate schools should develop an environment in which young researchers can
undertake research independently. Moreover, in order to firmly establish Malaysia as a
global competitor, it is necessary as a nation to develop human recourses adaptable to
emerging key fields of research presently lacking in personnel as well as in fields in which
industrial competitiveness needs to be strengthened. Measures enabling creative
researchers to play an active role not only in universities but also in various sectors such
as industry and public research institutes must also be considered.



7. IP ADVISORY SERVICES

Like most countries, Malaysia has a central agency – the Malaysian Intellectual Property
Corporation (MIPC) - responsible for the registration of intellectual property rights. Where

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registration is concerned, it’s role is to receive the applications filed by the public, examine
whether such applications comply with and are acceptable according the law, formalise the
registration documents (where granted) and maintain the records and renewals. However,
registration involves more than just the foregoing and much more preliminary work needs
to be done before the application is submitted, such as:

a) Giving advice on what form of intellectual property should be applied for. Many people
do not understand the difference between patents, trade marks and industrial designs
and need help in knowing what they have and what type of application they should
submit.

b) Searching for prior rights. Intellectual property is such that if someone else has earlier
applied for or registered something similar, this will negatively impact your own
application. Many people do not realise this nor do they realise that they are able to
search for such prior rights before they spend their time and money in making their
application.

c) Preparing the documents for submission. Like all official applications, there is a level
of complexity in completing the forms and knowing what to fill up or insert. Incorrect or
insufficient documentation can result in the application being rejected or even if granted
could result in lesser protection being granted than expected.

Traditionally, the MyIPO does not deal with pre-application matters such as the above and
the public is required to seek out the help of IP professionals, which are few and mainly
concentrated in the Klang Valley. The idea behind a one-stop registration agency is a
place that can handle all matters relating to IP registration from the pre-application to post-
application matters.

8. SEARCH SYSTEM (SEARCH ENGINE)

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Currently Malaysia is using a Search engine that does search on non patent literature i.e
search is based on abstract only. The whole patent document literature cannot be
searched and this makes search very inefficient – currently it is a free search engine. For
Malaysia to be competitive in the global arena, MyIPO is recommended to be innovative
by purchasing licensed search engine where patent search can be done efficiently. This
will reduce the time and human error in the process of granting the Intellectual Property
Rights to the inventor(s).


9. REGULATORY BODY FOR INTELLECTUAL PROPERTY AGENT

Currently there is no any body in Malaysia that regulated the Intellectual Property Agents.
Intellectual Property agents are part of a growing profession, one that will be under more
scrutiny because of the economic importance of intellectual property and of the
expectation by the public that certain basic regulatory requirements apply to all
professionals. The objective is therefore to implement a modern self-regulatory system for
Intellectual Property agents one that empowers our profession to better protect the
interests of IP owners and the public. In doing so, and the members would strengthen a
key element of a competitive IP system. It is recommended that a professional body is
established to regulate all IP agents. This regulatory body will be a comprehensive
admission process, continuing education, an enforceable code of conduct and an effective
and transparent disciplinary process increases the trust in the profession.

Professional Standards Board for Patent and Trade Marks Attorneys in Australia
The Board is a statutory body established under the Patents Act 1990 and constituted
under the Patents Regulations that:
 accredits courses at tertiary institutions that satisfy the requirements of the
regulations for registration of persons as patent or trade marks attorneys; and
conducts examinations in some of the subjects that comprise the examination for
registration as a patent attorney;
 assesses the tertiary qualifications of persons seeking registration as patent and
trade marks attorneys;
 exempts students from the requirements of a topic group based on prior study;

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 receives complaints, considers, and where appropriate, authorises referral of
complaints of unprofessional or unsatisfactory conduct made by clients of patent
and trade marks attorneys to the Patent and Trade Marks Attorneys Disciplinary
Tribunal;
 prosecutes these complaints before the Disciplinary Tribunal when requested by the
complainant.



10. CROSS LICENSING
A cross licensing agreement is a swap of access to company’s patent portfolios: in
essence it says "you can use my patents and I can use yours". Cross-licensing
agreements eliminate a huge amount of litigation expense, because a company that
enters into cross-licensing agreements with its main competitors can neither sue, or be
sued by, those most likely to hold patents that matter to its business.
It also means that companies that participate in cross-licensing agreements simplify
R & D, as they have less need to work around competitors' patents. A particularly
important aspect of this is that it greatly reduces the risk of accidentally infringing patents
by reinventing something that has already been patented. Accidental infringements are
common enough to be widely deliberately exploited.
In certain industries, especially high tech ones, major players tend to have such large
patent portfolios that they cannot practicably avoid infringing each other’s patents. This
means that any attempt to extract royalties for using patents is met with counter-claims.
This makes litigation expensive, very uncertain, and, even when successful, unlikely to be
very profitable after expenses have been paid and counter-claims settled.
Currently Malaysian companies or our Research Institutions are not practicing cross
licensing. It is recommended that our local Public universities enter into cross licensing
agreement among them. This will cultivate a new culture where inventors will be able to
improve other invention and without infringing other patent. This will also create a bigger
pool of Intellectual Property for licensing with third party without infringing intellectual
property rights.

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It is recommended that the

11. RESEARCH AND DEVELOPMENT FINDING EXHIBITION CENTRE
Currently The Government and the Research Institutes are keen to promote their research
findings and capabilities to potential entrepreneurs for mutual benefit. By saying this our
individual inventors, inventors from Institute of Higher Learning and Research Institutes
occasionally do get a chance to exhibit their R&D findings at MATRADE to attract potential
entrepreneurs. However such exhibitions cost a lot of money and effort to organize, even
for a few days at national level or regional level. This may not attract enough potential
entrepreneurs to the exhibitions whether local or overseas.
It is recommended
1. Universities and research institutions exhibit their research outcomes on products and
processes in a permanent, centrally located at their own universities i.e
“Exhibition Shop”
2. The exhibits will be on show on a year round basis
3. This project is to be coordinated and managed by a relevant government agency
(MOHE, MOSTI and AIM etc.) with an advisory committee comprising members from
among exhibitors and private sector trade organisations if they so chooses FMM is
prepared to be actively involved.
4. In addition to the static display, a year long programme to be drawn up and
implemented for exhibitors to make presentation of their research outcomes, with
talks and demonstrations on 1 or more items each time.
5. This would allow for commercialization and branding of those outcomes in order to
build confidence in the marketplace.
6. This ‘exhibition shop’ area is to complement the National Intellectual Property Rights
Depository – K.H.I.M which aspires to facilitate both governance in IPR management
and IP promotion through an on-line marketplace.
By having a permanent platform to exhibit, visitors are able to experience the product
(touch and feel) through demonstration and it’s convenient and easily accessible
especially for visitors from MATRADE, SME Corp, MIDA. This exhibition hall will be open
for public viewing for visitors from all over the country from all walks of life and different

20
ages all year round and will be a good platform to nurture the young, students on science
and innovation, and prospects of employment and business opportunities.

COPYRIGHT ISSUES

“Intellectual Property Assets” (IPA) plays a vital role in the current knowledge based
economy as the primary asset. The ultimate goal of IP creators is to obtain patent
protection. The inventors need better protections of these assets because these will be a
major source of Revenue and create competitive advantage for their business.
Registration is however only available for certain IPA classes namely, Patents,
Trademarks and Industrial Designs. Formal protection, via MyIPO or other intellectual
property registration office, is not ordinarily available for trade secrets or copyrights. In
some industries like ICT, Books, Music and Entertainment – it is often the SOLE means of
asserting IP rights is through COPYRIGHT. Copyright protection however has many
limitations, primarily because there is NO formal registration mechanism. The current
method of protection for copyright is via Statutory Declaration and it is not mandatory. This
method provides “evidence” of existence, which can be asserted in a legal dispute.
However, SD is not conclusive proof, as further proof can still be required to show
evidence of creation or ownership. The issue is, “who can prove that effort and resources
have been put in to the development of the work to justify ownership”
To ease these problems we have created a secure and safe “Digital Copyright Depository”
where creators and owners can electronically ‘deposit’ or ‘store’ their IPA and upon
completion of upload will be issued a certificate. In the event of a dispute, this certificate
can be used as ‘proof of existence’. If the copyright owner uploaded his “past” efforts at
different timelines – for example if deposits were made at each key milestones during
development phases – the certificates of deposit will additionally show his “IP trail”.

Shortcomings of existing position in Malaysia

On the face of it, Section 42 of CA seems to relieve the plaintiff or the prosecution, as the
case may be, of some of the burden of proof. It creates what is called a presumption of
law, where the supposed effect should be that whenever there is such affidavit or statutory
declaration, the court shall presume that the affidavit or statutory declaration evidence of
the facts contained therein. However, this provision has given rise to conflicting decisions

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resulting in uncertainties as to its scope and application and the tendering or admissibility
of any affidavit or statutory declaration in evidence made thereunder
Further, more often than not, such affidavits or statutory declarations are highly disputed in
proceedings on various technical grounds, such as issues of originality, authorship,
requirements for copyright subsistence and in certain cases, objections on the admissibility
of the affidavits or statutory declarations have caused substantial delay in the infringement
proceedings. It is also noted that the approach on admissibility taken by the courts varies
from one to another, to such an extent that it has become a common practice to object on
admissibility of the statutory declarations made pursuant to Section 42 of the CA in
criminal proceedings. The prosecution in criminal cases is often faced with an uphill task in
battling with the defence on the issue of admissibility of such documents and the lack of
guidance in decided cases.
It is also difficult for the court to decide the issue of copyright subsistence based on mere
averments of copyright ownership under Section 42 of the Copyright Act 1987. The courts
are often reluctant to rely on the statutory declaration without the benefit of oral evidence
from the maker of the statutory declaration and/or owners of the works.

United States of America

The US used to require compliance with certain statutory formalities such as copyright
notices and registration of copyright. Failure to comply could result in a loss of copyright or
a loss of certain evidentiary, procedural and remedial advantages. However, following the
US accession to the Berne Convention, the deposit and registration have been made
permissible rather than mandatory


Copyright is secured automatically when a work is created. However, the Copyright Act
establishes a mandatory deposit requirement for works published in the United States. The
1976 Copyright Act defines "Publication" as the distribution of (or offering to distribute)
copies of a work to the public by sale or other transfer of ownership, or by rental, lease, or
lending. In general, the owner of a copyright has a legal obligation to deposit in the Library
of Congress’ Copyright Office, within three (3) months of publication in the United States,
two copies for the use of the Library of Congress. Failure to make the deposit can result in
fines and other penalties but does not affect copyright protection.

22


United Kingdom
As in any of the Berne Convention member country, the UK Copyright, Designs and
Patents Act 1988 does not prescribe for registration of copyright in order to have
protection. Copyright is automatic in the UK. There is no central governmental copyright
registration body in the UK. However, there are independent organizations such as the
UK Copyright Service, an independent copyright registration facility, witnessing service
and an archive of original works which:
a) Provides copyright registration for original works by writers, musicians, artists,
designers, software providers, authors, companies, organisations and individuals
b) Offers an impartial supporting evidence of ownership.
c) Acts as a depository of copyrighted works and provides an independent proof of the
work.
d) It claims that based on its strict policies it is able to supply strong and independent
evidence.

Benefits of copyright registration from a Malaysian perspective

As indicated above, since there is no requirement with respect to any formalities, proof of
copyright ownership may pose considerable difficulties and inconvenience.
Registration of the copyright work may be able to provide a degree of certainty by
providing a contemporaneous record to show that copyright subsists in the work, at least
with effect from the date of registration. If registration of the copyright provides a
presumption of validity of copyright or ownership of copyright, such registration may help
to weed out false claims to copyright ownership or unnecessary challenges mounted by
pirates when they are not even able to provide any evidence to disprove copyright
subsistence or ownership. This will definitely shorten the litigation time and costs for
prosecution and copyright owner.
Another common difficulty encountered by the public or users of works is to determine
whether a particular work is already in the public domain. It is also not easy for the public
to track down the owner of the work for purpose of seeking prior consent in using the work.

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Registration of copyright should not be made a condition for copyright protection or a
prerequisite in order to commence legal proceedings, as this would be in contravention of
Berne Convention and TRIPs. It is submitted that in order for copyright registration to be
effective and workable, there must be additional benefits accorded to such registration,
similar to those offered by the registration system in the US. Subject to proper
implementation of such copyright registration, the IP Committee of the Bar Council
concludes that the benefits of copyright registration outweigh the cost, burden and time
expended by the owners in registering their copyright with a central depository system
managed by MyIPO.

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